Tech’s Rising Stars Push Into the Online-to-Offline Era

Although startups like Pinterest, Uber and Airbnb may not seem to have much in common except their lofty valuations, they share a similar purpose that could help describe the current era of consumer technology: Bringing the online world to the offline world.

This is not a new concept, of course. But it’s a meaningful moment for the physical world to be activated by social, financial, personalized and sensory data. And likewise, it’s a relief for technology companies to chill out about counting every minute people spend on their websites — and instead figure out ways to fit usefully into the living world.

If you judge by the multimillion-dollar bets investors are placing on consumer technology, offline-to-online era startups are among the biggest, by far. Investors just valued Uber at $3.5 billion, Pinterest at $2.5 billion earlier this year and Airbnb at $2.7 billion last year. After the Twitter IPO, these are what’s next.

Though they are not competitors at all, the way people at these startups design products around the online-offline dynamic is persistent and similar.

They collect data to make their systems more efficient. They personalize and learn based on user behavior. They work to exist in a 3-D world rather than on a flat HTML page. And they have access to a larger and more mainstream audience than has ever before used the Internet.

“We’re now seeing things come full circle, where the physical real-life experience is informed by the virtual-life experience,” said David Sze of Greylock Partners, which is making a number of bets in this arena, such as Nextdoor and Airbnb.

But at the same time, these startups face similar problems, including: Everything breaks down when the connectivity dies; the stakes are much higher in the physical world; and, regulators and incumbents tend to prefer the world as it was already set up. And perhaps most importantly, they open up yet more opportunities for people to be tracked when they don’t want to be.

A Lyft driver with the service’s trademark pink grille-mounted mustache

John Zimmer, founder of the peer-to-peer ride-sharing company Lyft — an up-and-comer valued at about a third of a billion dollars but continually facing threats around commercial licensing and insurance issues — can identify with all these pluses and minuses of the current era.

“For the last two decades, tech tended to make it easier for people to be isolated, rather than actually being in the real world,” he said. “Now we’re bringing them back together.”

Lyft, for example, has inspired a dedicated community but also has many haters and skeptics in the worlds of traditional transportation and insurance. Zimmer said his company’s innovations are half physical (participating drivers adorn their cars with recognizable fuzzy pink mustaches, and greet riders with fist-bumps) and half technological (Lyft coordinates supply and demand, and promotes community safety via monitoring driver and rider ratings, and requiring Facebook authentication).

“All that sets the stage for real-world physical interaction,” Zimmer said. “It shows technology can enhance experiences rather than take them over.”

“The next act of the Internet is taking all those connections and leveraging them to bring people back offline,” said Airbnb co-founder Joe Gebbia. “To me, that’s the next great design challenge that we’re facing.”

On that note, Airbnb employees have developed an almost cult-like devotion to a set of storyboards they developed around their host experience and guest experience, with episodes around planning a trip, messaging between a host and guest, and traveling to a new place. It gets really granular, with 32 panels in all.

Airbnb calls the panels “Snow White,” an homage to the first full-length animated movie from 1937, when Walt Disney famously used storyboards to build a narrative experience for that film to draw people in for a virtual story of more than an hour.

Once the narrative arc of Airbnb had been sketched out and drawn by a Pixar animator, the big takeaway for the team was that the Airbnb process can include many pivotal moments at the computer, and as many key moments off of it.

“‘Snow White’ made us realize we wanted to grow our mobile team, because it can be with you across those frames,” Gebbia said. “Mobile is a beautiful way to go from online to offline.”

A panel from Airbnb’s “Snow White” storyboard of a prospective host’s experience

Airbnb has mounted versions of the Snow White frames (which, to be clear, don’t include dwarves or anything like that; it’s an inspiration in name and concept only) on the walls of every one of the company’s dozen offices. I spent a recent afternoon at Airbnb headquarters, and could have sworn that everyone I met had been briefed to refer to “Snow White” and “bridging the gap between online and offline” in our conversations.

Gebbia underscored that’s actually the way people at Airbnb talk. “It’s a North Star for us,” he said. “It comes up every day for me.”

The bookmarking site Pinterest also wants to follow its users out into the world, though perhaps with less allegorical flair than Airbnb. “We help people to discover things they love and inspire them to do them in their real lives” is Pinterest’s mission statement.

“In a way, that’s why mobile is so important for us,” said Pinterest engineering head Jon Jenkins. He cited a recent Harris Interactive survey that found that 72 percent of U.S. smartphone owners say their devices are within five feet of them the majority of the time.

“I love it when techies in the Valley say they don’t understand how Pinterest became so popular,” said Jenkins. Perhaps because those techies were ignorant of what really mattered to many people — whether it was recipes or DIY projects or parenting advice.

The computer screen might suck you in, Jenkins said, but the real impact is when you’re actually inspired to apply what you find on Pinterest in the real world. “These are important aspects of people’s lives that weren’t being fulfilled on the Internet,” he noted.

Though Pinterest is often compared to Facebook and Twitter, Jenkins argued the more apt parallel is a sort of discovery version of the Google search engine. Pinterest users contribute to an index of objects — which often represent real-world products or projects — versus Google’s massive index of linked Web pages.

“Google is pretty awesome if you want to find out how high is Mount Everest, or who was president in 1856, or how much does a Chevy Camaro weigh,” Jenkins said. “But sometimes you don’t know the exact question to ask or the vocabulary to describe it.”

He added: “I can’t describe my taste in fashion, but I can pin 10 shirts I like. I don’t need to know the language of fashion to describe what I’m interested in.”

When Pinterest works — and to be fair, it doesn’t always work, and the site seems to have lots of spammy content these days — the service connects the intangible and the tangible.

But tangible things don’t come in infinite supply, like digital goods. Wanelo — a shopping-oriented service like Pinterest that is tremendously popular among college-age women — has built an index of 7.5 million products. To be clear, this is not just an e-commerce site; the products are all posted by users and not feeds from retailers.

Core to the company’s premise is that everything on the site can be bought. Out-of-stock Wanelo posts no longer represent physical products; they’re just digital images. So the company had to figure out what to do when saved items become unavailable. The current solution: They stay in a user’s profile, but disappear everywhere else, said Wanelo CEO Deena Varshavskaya.

Uber’s new fare-splitting feature

But Pinterest and Wanelo users could take part in the land of fantasy and inspiration without ever leaving their computers. That’s not the case with Uber, the ride-hailing service best known for its black cars.

The company’s lead experience designer, Shalin Amin, recently helped launch fare-splitting, a pretty obvious feature for Uber, which automatically bills the person who hailed the ride. In a version that wasn’t released, users would receive a four-digit code they could share with their friends so the system would know they were on the same ride.

But if people didn’t respond right away, it backfired, because Uber charges users immediately when a trip finishes. A better solution? Giving users access to their phone address books, so they could text other riders directly in the moment.

Uber’s internal mandate is to “make technology invisible,” Amin said. “We want you to open the app, have a single button, have the car come to you and then never think about it again.”

But Lyft, Airbnb, Pinterest, Wanelo and Uber are still just sites and apps. Where the online-offline bridge gets even more interesting is with devices that are connected to the Internet. That’s not just so the smartphone can be a remote control to turn on and off the light switch, but so the Internet can work its magic of collecting data, analyzing patterns and perhaps even imbuing objects with intelligence.

People like to call this the Internet of Things, and some of the most valuable private companies in the space include thermostat maker Nest and fitness tracker Fitbit.

Another company in the space that’s smaller and earlier — but already well-funded and highly anticipated — is Anki, whose first product will be an iPhone-controlled game where toy cars race and shoot at each other, some controlled by players and some by artificial intelligence.

“Robotics is the extension of you to the physical world,” said Boris Sofman, CEO of Anki, who unveiled his robot car demo with the help of Apple CEO Tim Cook at a recent Apple event. “What we have now is an opportunity for the physical world to be made intelligent through software.”

An Anki Drive car prototype

“It’s in the real world, so there are real constraints,” Sofman said. “You can’t have something explode or come off the ground. So, for us, there’s no bullets flying though the air — but there are lights flashing, the whoosh sound of the bullet, and then the car physically falling off the track.”

The real world can be so much more resonant, Sofman said, offering a colorful example: “For a virtual Tickle Me Elmo, nobody would go all Jerry Springer in a Walmart or buy them on eBay for a thousand dollars.” A real stuffed toy, he said, is a different story.

Still, there are many downsides to connecting the offline world for Anki, Uber, Airbnb and everyone else. A software bug or crash used to mean having to restart your computer. A loss of connectivity meant you had to read a book. These days, the more you rely on something — whether it be a ride to the airport or a pin board full of rainy-day projects — the more it’s an issue when it doesn’t work.

Perhaps most important, bringing the world online means that everything can more easily be tracked. There’s actually a search engine for connected devices that has probably allowed miscreants to find things like baby monitors and control them remotely, as Forbes reported. That scary potential goes beyond the “Internet of Things.” If you catch a ride with Uber or Lyft, your profile and location and payment history are all linked together in a much more hackable way than paying cash for a taxi hailed by hand.

But this online-to-offline era isn’t theoretical; it’s already here. Michael Horvath, CEO of the sports-tracking app maker Strava, opened a recent interview with a quip:

“So, the D in AllThingsD stands for ‘digital,’ right?” he asked me. “But isn’t everything digital? Maybe your site should just be called ‘All Things.'”

It’s perhaps too self-referential of an ending, but it does seem more than apt.

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